Your data is precious, but it’s also everywhere.
It’s hard to stop the digital world from collecting at least some information about you — but it’s the way that businesses collect and store this information that can make or break them. When a company uses your data to help you get a discount on a product you’ve been eyeing or fall in love with a new band on Spotify, that’s a win. But when companies mismanage data and put your sensitive information at risk? Not so much.
Because of this, customer data management is at the crux of every business’ success.
A good customer data management plan enables your business to:
- Collect customer data, like email addresses and demographic information.
- Store it in a way that’s both safe and manageable.
- Use it to optimize your marketing efforts and reach the end conversion your business needs.
The scary truth is that we encounter a lot of clients who don’t know where to begin. This week, D Custom Director of Digital Media Strategy Kate Crouse gives some insight for building a successful customer data management strategy.
What’s the best place to start when auditing a new client’s data management process?
It really depends on how sophisticated your client is in the customer data management and marketing world. But a good first step for any client is to evaluate what tools they are using to collect data currently and if they are using a data management platform (DMP).
A few tools we recommend for marketers:
The presence (or lack thereof) of a centralized DMP tells us a lot about a client’s maturity in the data management process.
What are businesses struggling with in the world of customer data management or data-driven marketing?
The biggest struggle is the most obvious one: Failure to collect and retain data in the first place. Many companies, regardless of vertical, do one of two things:
- Disagree internally on what data to collect and how they should do it.
- Lag behind industry best practices.
(Note: If either of these sounds like your company, don’t be ashamed to admit it. The first step is recognizing the problem.)
Still more companies have started collecting data, but aren’t using it — and that’s usually because they don’t have someone in-house who can put together a comprehensive, data-informed marketing strategy. There’s no shame in that; that’s one of the things that agencies, like ours, are for.
How does this data inform a good marketing strategy?
We take reams of data — email addresses, buyer history, content consumption patterns — and put together actionable demographic, firmographic, and psychographic models to build a strategy from. A quick breakdown:
- Demographics: Data segments built off hard points like income, geographic location, gender, etc.
- Firmographics: The B2B version of demographics, including points like total revenue, employee population, etc.
- Psychographics: Data segments built off consumer attitudes, opinions, and viewpoints.
That’s just the tip of the iceberg. Once those three primary data models are in place, it’s time to extrapolate purchase history (what your customers have bought from you before), promotion history (what you’ve offered and how audiences have responded to it), and customer referrals and ratings.
Mixing and matching that data can uncover key consumption patterns and target demographics. And when it comes to collecting this first-party data, email is a great place to start.
How does email enable you to own your customer relationship?
Email addresses have become a lifeline for brand marketing. Most Americans are on a daily email consumption cycle, and it’s much more cost-efficient to reach an audience via email than traditional direct print mailings. Those same email accounts can also be matched to social media accounts, giving marketers a chance for multiple touch points within one campaign.
Email also offers the chance to collect a lot of audience data. Through your email communications, you can see:
- How engaged an individual is with your brand (Are they opening every email? Or barely showing signs of life?).
- What type of content intrigues them — which can lead you to some assumptions about their stage in the buying cycle or tell you how to most effectively attract their attention in the future.
- Some of the basic information that an IP address or email extension will tell you.
The way email enables you to own your customer relationship is more unique than it may seem. Take social media, for example. It’s an incredibly effective marketing tool, but at the end of the day, Facebook, Instagram, LinkedIn, or whatever platform you opt to use will own the relationship with your followers. They set the terms and the price of communication. If Facebook goes away (or your customer becomes disengaged with the platform), so does your audience.
What are some data management wins (or fails) we can learn from?
Why do you love Netflix so much? Aside from the fact that it provides convenient, on-demand content, it also knows you. It suggests shows you actually want to watch. That’s data-driven marketing. Amazon makes our lives incredibly easy with fast delivery and a variety of product options, but it also gets to know you and suggests products you may like. That’s data-driven marketing.
And before you say, “OK, OK — that’s Netflix and Amazon; I can’t be expected to perform on that level” — yes, you can. The “Amazonification” of customer experience affects all of us. Your customer is accustomed to the level of service and experience that sophisticated, data-driven companies are providing. You have to keep up.
Seventy-four percent of online consumers say they get frustrated with websites when content, offers, ads, promotions, etc., appear to have nothing to do with their interests. Don’t let that be your customer. And you definitely don’t want a one-size-fits-all communication strategy that turns into a marketing fail that upsets your audience and becomes a PR nightmare.
The key to avoiding such mishaps? Collecting and storing your data correctly.
What are the keys to properly storing data?
Make sure your data collection interface is secure. Are you gathering email addresses or credit card information through your website? Make sure you’re operating with an https certificate, which essentially encrypts all information exchanged between a user’s browser and your site. Protect yourself, too — use a captcha to help screen out bot/spam submissions on your collection forms.
Storage of consumer data is just as important. If your company utilizes a CRM or marketing automation tool (like HubSpot, Salesforce, or Marketo), that’s where all your data should funnel — those are safe platforms that take data protection seriously, and will help you stay organized while following customer data management rules (like the recent GDPR regulations). Don’t just list email addresses and consumer behaviors in an Excel spreadsheet on your server. And regardless of where your data lives, use randomized password protocols (and change them often) for access.
Safe, strategic data management is one of the most important pieces of the digital marketing landscape, and it’s something all organizations must embrace. If you haven’t yet, don’t be afraid to start small (a savvy email service provider like HubSpot can operate as your primary DMP).
And if you have more questions or concerns about your company’s data management plan, just ask.